Collinson FX Market Commentary - Nov 1 - Business confidence slumps

by Collinson FX on 1 Nov 2017 Collinson FX Market Commentary - Nov 1 - KIWI business confidence slumps

French and EU GDP edged slightly higher, 2.2% and 2.5%, respectively. This was positive news for a politically wounded Union. EU inflation has been softer, drifting back to 1.4%, which is a warning signal to future growth. The problems surrounding the zone is the Catalonia Independence, which threaten European Unity, while Brexit repercussions continue to evolve. Spain has now threatened Catalonian leaders with sedition and rebellion prosecution. The heavy handed approach is perhaps a little too much stick?

The FOMC meeting dominates US market speculation and the naming of the next Fed Chair remains a hot topic of conversation. The Case Shiller Home Price index rose 6%, while Consumer Confidence continued to climb, in line with the string of recent economic data gains. The EUR traded 1.1650, while the GBP pushed back to 1.32570, as the Bank of England remains ahead of the curve.

Australian New Home Sales contracted 6.1%, while the nation remains unsettled due to precarious nature of the political situation, with the Government's majority in question. The AUD drifted below 0.7650, while the NZD is looking to test 0.6800, on the downside.

NZ Business confidence contracted sharply, down 10.1%, which is a real-time economic measure. Employment data released today will reflect historical economic performance. As the 'grand rainbow coalition' establish their agenda, adding flesh to policy bones, historical data will begin to reflect the direction of the economy under the new Government.

Collinson FX Market Commentary - Oct 31 - NZD stays steady

US equity markets opened softer for the week after rumours of a phased in corporate tax cut. The major political story for the week, was the indictment of a former Trump campaign manager, Paul Manafort. The charges relate to 10 year old actions and confirms the nature of the Mueller investigation, which has spread far from the original investigation, inferring there was little basis to the Russian collusion.

US Personal Income and Spending was steady, while EU Consumer Confidence remained negative, further confirming the relative economic space the respective zones are in. The EUR holds above 1.1600, while the GBP regained 1.3200, in a challenged single market. Growth remains weak, with German CPI dipping to 1.6% p.a., after the latest measure was 0.0%!

The NZD was steady, trading around 0.6850, while the AUD remains under pressure. The fallout from the loss of the deputy PM, after eligibility issues, has taken the AUD to 0.7650. The loss of a majority in Parliament and continued flagging poll numbers have hit confidence.

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